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The most recent financial statements for Fleury Inc., follow.Sales for 2012 are projected

The most recent financial statements for Fleury Inc., follow.Sales for 2012 are projected

The most recent financial statements for Fleury Inc., follow.Sales for 2012 are projected to grow by 20 percent. Interestexpense will remain constant; the tax rate and the dividend payoutrate will also remain constant. Costs, other expenses, currentassets, fixed assets and accounts payable increase spontaneouslywith sales.

FLEURY, INC.

2011 Income Statement

  Sales

 

 

 

$

725,000

 

  Costs

 

 

 

 

591,000

 

  Other expenses

 

 

 

 

12,000

 

 

 

 

 

 

 

 

  Earnings before interest and taxes

 

 

 

$

122,000

 

  Interest paid

 

 

 

 

14,000

 

 

 

 

 

 

 

 

  Taxable income

 

 

 

$

108,000

 

  Taxes (50%)

 

 

 

 

54,000

 

 

 

 

 

 

 

 

  Netincome

 

 

 

 

54,000

 

 

 

 

 

 

 

 

  Dividends

$

33,360

 

 

 

 

  Addition to retained earnings

 

20,640

 

 

 

 

 

             

 

FLEURY, INC.

Balance Sheet as of December 31, 2011

Assets

 

Liabilities and Owners’ Equity

 

  Current assets

 

 

 

  Current liabilities

 

 

 

    Cash

$

21,540

 

    Accounts payable

$

55,700

 

    Accounts receivable

 

33,860

 

    Notes payable

 

14,900

 

 

 

 

 

 

 

 

 

    Inventory

 

70,820

 

      Total

$

70,600

 

 

 

 

 

 

 

 

 

      Total

$

126,220

 

  Long-term debt

$

139,000

 

  Fixed assets

 

 

 

  Owners’ equity

 

 

 

    Net plant and equipment

$

280,000

 

    Common stock and paid-in surplus

$

125,000

 

 

 

 

 

    Retained earnings

 

71,620

 

 

 

 

 

 

 

 

 

 

 

 

 

      Total

$

196,620

 

 

 

 

 

 

 

 

 

  Total assets

$

406,220

 

  Total liabilities and owners’ equity

$

406,220

 

 

 

 

 

 

 

 

 

 

               

 

If the firm is operating at full capacity and no new debt orequity is issued, what external financing is needed to support the20 percent growth rate in sales?

Abhinav 02-Dec-2019

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